Crypto.com’s Visa rewards cardholders are not thrilled after a blog post from the cryptocurrency trading platform on Sunday said it would unexpectedly slash rewards across all membership tiers.
The prepaid card lets platform users spend their cryptocurrencies and stablecoins in fiat currency at Visa-accepting merchants, with users topping up funds periodically from their Crypto.com accounts. Cardholders earn their membership by engaging with Crypto.com’s own cryptocurrency, CRO token. If they stake the token—thus supporting its blockchain consensus mechanism—they unlock successive card tiers, each burnished with whimsical colors. (To reach the highest “Obsidian” tier, cardholders must stake $400,000 worth of CRO for at least 180 days.)
Spending with the card reaps cash back rewards, which are paid in—you guessed it—CRO tokens. But with the recent move, the rewards will drop from 8% to 5% for Obsidian members; from 5% to 3% for “Icy White/Frosted Rose Gold”; from 3% to 1.5% for “Royal Indigo/Jade Green”; from 2% to 0.5% for “Ruby Steel”; and from 1% to 0% for “Midnight Blue,” starting June 1. Furthermore, rewards will be capped at $25 to $50 per month for lower tiers.
That’s a significant cut, which Crypto.com said was necessary to “ensure long-term sustainability.” But its users are lashing out on social media, with the general consensus being that the platform just lost itself a lot of customers who are taking their business elsewhere after their current staking periods are up. And the hits keep coming for cardholders, as CRO’s price has fallen by nearly 15% since then (as a reminder, rewards are paid in CRO).
It could be momentary backlash, or it could kick off a long-term downturn for Crypto.com, which has skyrocketed in popularity over the last year—partly because of its high-profile sponsorships with the likes of Formula One and Matt Damon, but largely because of its generous rewards program. At the end of the day, most knew that the program was too good to last, but disgruntled social media users argue they weren’t given enough notice to mentally or financially prepare for the sudden shift.